House oversight committee investigates DC profiting from foreclosures
The House Oversight and Government Reform Committee is investigating Washington, D.C., officials over their methods of foreclosing on homeowners’ properties due to unpaid taxes. Specifically, the examination focuses on the city’s practice of selling tax liens to third-party investors, who can impose up to 18% annual interest and initiate foreclosure after just six months. This process allows investors and the city to profit from the resale of foreclosed properties, often at the expense of the homeowners, especially affecting elderly and minority residents.
The committee, led by Chairman James Comer, questions whether these practices violate Supreme Court rulings, notably the 2023 decision in Tyler v. Hennepin County, which ruled that governments cannot retain profits exceeding the property’s tax debt. Critics argue that D.C.’s procedures effectively result in wealth theft, with homeowners losing significant equity, sometimes up to 80%, while investors and the city benefit.
There has been controversy and legal challenges surrounding this foreclosure method, including cases like that of bennie Coleman, a former Marine who lost his home after missing a small tax payment. Comer has criticized the city’s practices and urged the D.C. Council to provide a briefing on the matter, expressing concern that city officials have yet to respond adequately. The investigation aims to determine if local laws comply with federal court rulings and to address the disproportionate impact on vulnerable communities.
The House Oversight and Government Reform Committee is investigating Washington, D.C., officials over their method of foreclosing on properties whose homeowners have failed to pay their property taxes.
The committee is investigating the city’s practice of selling tax liens to third-party investors, who can charge up to 18% annual interest on the property tax debt and file a foreclosure complaint on the home after just six months.
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If the property gets foreclosed and ultimately resold, the D.C. government and the third-party investor can pocket the equity or profits from the sale in excess of the property’s outstanding tax debt and interest, while the homeowner pockets none of that money, according to the House oversight committee.
Oversight committee chairman Rep. James Comer (R-KY) argues in his letter to D.C. Council Chairman Phil Mendelson that “the District’s practices appear out of step with Supreme Court legal precedent and disproportionately impact elderly and minority homeowners.”
Comer said the investigation will center on whether the district is out of compliance with the Supreme Court’s unanimous 2023 decision in Tyler v. Hennepin County, in which the court held that the government cannot keep the excess profit of a property’s foreclosure sale beyond the owner’s tax debt.
“While many states have amended their laws to abide by the Court’s ruling in Tyler, the District continues the practice of taking generational wealth accrued through home ownership from hard-working families and handing it to third-party investors,” Comer wrote in the letter. “Washington, D.C., our nation’s capital, is depriving Americans of their property through punitive tax law that results in home equity theft.”
The practice has been controversial in the district for several years. Properties still occupied by homeowners are exempt from the method of foreclosure after a lawsuit resulted in the exemption. Former Marine Corps Sergeant Bennie Coleman, 76, who had dementia, filed a lawsuit against the district when he lost his house after missing his $137 property tax payment once the city sold his lien to an investor.
Comer wrote in the letter that the process can cause district homeowners, whose liens are sold to third-party investors, to lose 80% of their home equity because of debt that could have been only 20% of the home’s value.
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Comer wrote in his letter that the D.C. attorney general’s office was “dismissive” in its response to the committee’s concerns expressed in 2025 and that Mayor Muriel Bowser‘s office has yet to respond. In his letter to Mendelson, Comer is asking the council to provide a briefing to the committee by June 30, 2026.
The Washington Examiner has reached out to Mayor Bowser and Attorney General Brian Schwalb’s office for comment.
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